Rising Drug Prices Wipe Out Discount Cards’ Benefit

For Immediate Release:

May 28, 2004

Contact:Stacey Farnen202-225-3130

WASHINGTON – House Democratic Whip Steny Hoyer (MD) released the following statement today regarding two recent studies by the American Association of Retired Persons (AARP) and FamiliesUSA. Both studies showed that the price of name-brand prescription drugs most used by seniors has increased substantially above inflation for the past four years, thus severely undercutting any possible assistance by the new Medicare drug discount cards issued by the Bush Administration. The discount cards will go into effect next week (June 1):

“America’s seniors and Medicare beneficiaries have been waiting for years for help in obtaining the prescription drugs they need and that are critical to maintaining their health. While I encourage eligible low-income seniors to take advantage of a $600 subsidy contained in the new prescription drug bill, I continue to urge caution to other seniors who may see little or no benefit with the discount cards.

“The drug cards fall short of the assistance seniors have been waiting for. The prescription drug legislation should have allowed the government to negotiate lower drug prices and made them available to seniors at an affordable cost – but Republicans refused to include such a provision.

“Unfortunately, two studies published this week illustrate that, even after the discount card program goes into effect, most seniors will still be paying much higher drug prices than they have paid in recent years.

“In a study tracking the prices of 197 of the most widely used brand-name drugs from 2000 to 2003, an AARP study found a cumulative increase of 27.6 percent, compared with the general inflation increase of 10.4 percent. In a separate study, Families USA analyzed the prices of the top 30 brand-name drugs prescribed for seniors, such as Lipitor and Celebrex, and found that they rose on average 4.3 times higher than inflation between January 2003 and January 2004.

“However, even using the Center for Medicare and Medicaid Services' optimistic estimates, seniors enrolled in the new discount card program would at best see average brand-name drug discounts ranging from 11 to 17 percent – negating much of the potential savings from the discount cards.

“An affordable, guaranteed prescription Medicare drug benefit will improve quality of life for millions of elderly and disabled beneficiaries. I call on President Bush and Republicans to join with Democrats in our fight to offer real savings to our parents and grandparents.”